I've been playing with a PS3 Controller since the beginning of the game. I really like playing with a controller since it gives me far more control over my character than a keyboard. As I progress through this game though, I find myself requiring to do tighter movements, requiring almost pixel perfect movement. I've been noticing this since Backup Shift but playing with a PS3 Controller actually gives me very inconsistent movement. What I mean by this is whenever I try to jump straight upwards, I mostly jump either to the right or to the left. The same can be said about dashing downwards. I can never seem to do straight movement. This problem is also noticeable for trying to hit straight to the right/left.

My question for other PS3 Controller users is if any of you have/had a similar problem. If so, how do you deal with this? :(

First of all: The problem you're having is using a thumbstick, this game simply cannot be played at the highest level using a thumbstick as it's too inacurate, you simply need 8dir input.
I suggest you you the D-pad instead, this will give far better results once you get used to it.

Second:
"I really like playing with a controller since it gives me far more control over my character than a keyboard." I hear people say something along this line once every while, but I simply don't understand it, in what way does it? Especially in a thread in which you say the exact opposite as to what you're stating here.

There is 0 benefit to using a controller over a keyboard from a technical standpoint in this game, as analog movement doesnt make a difference other than making it harder. That does not mean keyboard is the superior control method, it just means both are just as good at controlling this game given you're using 8directional control (such as a D-pad or a keyboard)

I actually do use the D-pad. I also checked whether I'm actually holding two buttons by accident or not but it doesn't seem that way. It's just that if I push the [up] button too much it kind of pushes the buttons besides it as well.

The controller over keyboard part is actually simple to explain; I use a laptop instead of an actually keyboard where the arrow buttons are just way too small to be used for games, especially games like these. Although, even if I were using a real keyboard, I still feel like having a controller in my hands kind of feels more comfortable than a keyboard. I somewhat agree that from a technical standpoint there should be no difference. The difference is that a controller and keyboard are operated by different fingers and also fit differently. I just feel more comfortable using my thumbs for all the hitting and jumping. I realize this may not be the case for movement. I guess that in my decision between a keyboard and controller, I valued the jumping/hitting more than movement (which is to be honest kind of strange actually). Maybe I'll try a combination of both where I use my left hand on the WASD buttons for movement and my right hand on my controller for the jumping/hitting/dashing (altho I can imagine this feeling really awkward).

What exactly is the highest level? :D
I'm using a 360 Xbox controller and I'm using the analog stick for movement.

I'm not trying to suggest people to play with the analog stick as I know it's most of the time suboptimal but it's somehow for me the best movement method.
Just wanted to say that there are crazy people like myself xD

I'm not sure what you mean, but I think what you mean is not a controller problem. I think it's just how the game works, jumping straight upwards requires your character to barely move AND not pressing any direction while you press the jump button, it's quite hard in some spots to be honest. Did you try it with the keyboard for example, to see if it's easier to do?

I also use Dualshock3, and while it may feel like you're pressing only one direction (IE straight down), the problem is you could be pressing the edge of the direction, and thus get an angle. Its actually been something i've been pretty annoyed about, and tried using a Snes controller via USB adapter, and it turned out to be worse (could have been a bad controller, i'll have to try some more).

For me, I have much better muscle control with a controller for platforming, and I set up my buttons as such. I have zero problems with a PS3 controller as well, though I highly advise avoiding the thumbstick.